I taught a class called Airline Economics at George Mason University since 2017. The course is taught every semester and has proven to be very popular with students due to its applied nature, lack of a required textbook, and good feedback from students taking it. The airline industry is constantly changing, so while the core content I teach has remained largely constant, I have kept things up to date with problem sets and business cases that relate to what happens during the year. For example, shortly after the start of the pandemic, students received a case to find out if they should block middle seats on their fictitious airline.
While teaching the class, I also learned from this experience. The class is an upper-level option and is also listed for graduate students. It means students want to be there, and it has created classes with good engagement and good questions. Here are five important lessons I learned:
Language is important
Every business has its own unique metrics and terms. Airlines have a lot of both, and spending some time at the start of the semester looking at them and their relationships has proven very helpful. Many industry reads assume knowledge of things like revenue per ASM (RASM), cost per ASM (CASM), load factor (percentage of seats occupied), and more. Performance and RASM are often tricky for students, and also for airline employees. This becomes important when learning the basics of revenue management, as this process tends to reduce yield while increasing RASM.
Equally important are measures of operational and financial performance, as on time, completion factor, aircraft utilization, margin and various profit measures. Knowledge of these terms enables students to read analyst reports and public earnings reports with confidence and skill. It also makes it easier to learn about prices, schedules, alliances and loyalty programs when you can freely use these terms and measures in a common and understood vernacular.
Students can be brutally honest
In some past classes, I started the class with a short quiz based on the assigned reading for the week. After bombarding a few, a young lady looked at me and asked, “What’s the reading quiz hack?” Somewhat surprised, I replied, “Try to actually play the assigned piece.” Most students flew and George Mason has a large international population, so often my students are not only familiar with flight but also with long distance flight. Few complain about baggage fees, but many complain about spotty wifi on board.
It’s tough being a student, and while I assign a lot of work with deadlines, I also tend to be liberal when it comes to late submissions. I often hear surprisingly honest answers about why an assignment wasn’t turned in on time, about family issues, or challenges from other classes or work. On certain assignments, I ask for opinions on sometimes controversial subjects and I am often delighted that the students take firm positions and defend them aggressively.
Success in airlines is highly transferable
Since the airline economics class is highly applied economics, many of the ideas discussed in the class have good transferability to many other businesses. Consider ideas such as revenue management, cost control, finding ways to measure incremental profitability, and contracts within partnerships. Each of these is discussed in a specific airline context in the classroom, but each also has direct application in many businesses.
This is why the class, although taught within the School of Economics, is also popular with business, finance and engineering students. In real life, this is also true, as many airline executives have successfully pursued opportunities in other businesses. It is less common to see movement in the other direction. Low airline margins, the complex nature of business, government regulation, high need for labor, and capital intensity all create disciplines that are valuable for many business situations. I have had several students who have gone on to work in other companies, but to say that what they learned in the airline course helped them more than any other course they took.
There is no shortcut
Just like in the real world, there is no way to “check the box” to get a good rating in airline economy class. There’s a lot of work to do, a lot to read, and falling behind is a very bad strategy. In the first class of each semester, I tell students that the difference between A’s and D’s in the class is largely about actually submitting all required work. Although not part of the formal curriculum, there probably isn’t a more important lesson being taught in the classroom.
Another shortcut some try to take is not to read carefully. If the assignment says there are three clear deliverables, I’ve learned to expect some students to only submit one or two. Or, if they don’t know the answer, they can just write down details on a related topic that they understand. I recognize that many of my students are also working or taking a full course load. So, I don’t expect them to take a lot of time between classes for their airline jobs. But the time they devote must be spent on the actual work assigned. Again, another great life lesson.
The future for airline industry talent is bright
Students taking the Airline Economics course are smart, industrious, and ready to take a stand. Every semester, my faith in the future in general, and in airlines in particular, increases. This is because these students are a small subset of a generation that is often criticized for having too thin skin or not wanting to work hard. My experience is the opposite of this, as most students show an immense ability to understand complex ideas. They are also good communicators and willing to take a stand on issues and back it up with facts, data and analysis.
My idea of teaching this course was rooted in my goal to give back and share my experience of working in an important industry. Yet, by doing this, I learned at least as much as my students. As part of the final exam of each semester, I ask students to give me an idea to improve the class for the next group. These ideas have been helpful and make each semester stronger. And every semester I learn more and I thank everyone who took the course for that, and I thank George Mason for bringing the course forward.